Merchandise exports jumped as high as 27.6% in March from a year before — growing for a seventh straight month even in the aftermath of demonetisation — thanks to a rebound in the outbound shipments of engineering goods, petroleum products and garments, apart from a favourable base. With this, exports in the last fiscal grew 4.7% to $274.64 billion — a much-needed rise after two successive years of decline.
Imports, too, jumped 45.3% in March — aided by a jump in the purchases of petroleum products (101%), gold (329%) and electronic goods (32%) — with merchandise trade deficit touching $10.44 billion. Despite the latest jump, imports in the last fiscal eased 0.2% to $380.36 billion.
In a comfort for policymakers, non-petroleum and non-bullion exports in March rose an impressive 26%. Even non-oil imports in March jumped a massive 33.21%, suggesting the growing appetite of the economy. Interestingly, exports of meat, poultry and dairy products grew almost 17% to $429.8 million despite a crackdown on illegal abattoirs in Uttar Pradesh, which accounts for a bulk of the country’s beef exports.
The data showed while exports rose to $29.23 billion in March from $22.91 billion a year before, imports jumped to $39.67 billion against $27.31 billion a year earlier. Also, services exports during February dropped 3.8% to $13.06 billion. Such exports had dropped 1.7% in January. Services imports in February, too, declined 14% to $7.24 billion. In January, services imports had grown 1.4%.
But analysts say the key to any improvement in export competitiveness will be how much the currencies of its peers depreciate against the dollar in such a scenario. Although the rupee has witnessed some volatility in recent months, it still remains one of the best-performing currencies among emerging economies.
Higher imports augur well for export prospects as well, as the share of import-intensive export sectors — such as gems & jewellery, chemicals and transport equipment and petroleum products – in overall exports rose from 35% in 2000 to around 45% in 2015.
Federation of Indian Export Organisations (FIEO) president GK Gupta said continuous positive growth in exports for more than half a year is not only very enthusing and encouraging sign for exporters, but also for the economy as a whole. He added that the growth across all major sectors in 25 out of 30 major product groups have not only been positive in March, but sectors, especially iron ore, have continued to show an overwhelming growth.
Increasing imports are primarily on account of high imports of gold, pearls, precious and semi-precious stones which augurs well for gems & jewellery exports in months to come. “The high imports of petroleum is also reflected in higher exports of petro products. However we need to analyse the reasons for increasing electronic imports,” he said.